12 Step Guide to Getting Your Home SOLD!
Welcome Back, Savvy Home Sellers!
Today we begin Step 6 of my 12 Step Guide to Getting Your Home SOLD! Last time, in Step 5, we discussed preparing to show your home for sale. Once you decide to sell your home, it is important to prepare both yourself and your home for showings.
Step 6: Understanding the Cost of Selling Your Home
Today, in Step 6, you will learn about what it truly costs to sell your home. A home seller may thing selling a home is strictly profit, but there are several costs and fees associated withthe home selling process. Here are the expenses you should expect to pay when selling your home:
Repairs and Updates
When selling your home, you will likely have to pay to make some repairs and updates. In order to be more competitive, you may choose to add some updates such as granite counter tops or stainless steel appliances before listing your home for sale. Your listing agent may also suggest some repairs to make before selling your home, such as replacing the carpet.
Typically, a buyer will hire an inspector to inspect the property before submitting an offer. The inspector will point out things like termite damage, radon levels, septic system and well integrity, electrical or HVAC concerns, and so on. Some of the issues found by inspectors may be costly to repair, and home sellers should be financially prepared to negotiate these repairs with buyers. These defects are often what the sellers would want to have fixed if they were to continue living in the home, so they will likely have to make the necessary repairs in order to close the sales deal.
In our area, a home seller typically pays 6% of the sales price as real estate commission. Half of this commission goes to your listing agent broker, and the other half goes to the buyer's agent broker. There are some discount real estate agents that ask lower commission, but be aware that they may provide the minimum services and not advertise as much or give you the attention and advice needed to get your home SOLD. It is also important to remember that the commission that you as the home seller will pay is based on the sales price of your home, not the listing price, and that the agent will have to split it with their broker's company.
The term "closing costs" refers to the fees and payments that must be paid during the closing on a home. Several elements may make up closing costs, but here are some of the most common closing costs a home seller should expect to pay:
Tax Proration: Home sellers are responsible for paying property taxes for the last month they lived in the home. If a home seller pays his real estate taxes seperate from his mortgage, he would have to pay the taxes for that last month in the house at closing. If, however, the home seller's taxes are included in the mortgage payment, that tax money stays in escrow, and it will be accredited to the seller after closing.
Interest Proration on Loan: At the day of closing, the seller will be required to pay the amount of interest on the loan for the next month; this is because the interest on a loan is usually paid in arrear.
Paying Off the First Deed of Trust: The home seller will be required to pay off the current loan that he owes before transferring the title to the home buyer.
Closing Service Fee: The amount of this fee depends on the title company used, but in our area it is usually about $150. This fee covers all the paperwork done for the sale of your home, and it is typically split between the buyer and the seller.
Closing Protection Letter (CPL): A CPL is optional for home sellers if the home buyers are paying cash and are not financing the home. A Closing Protection Letter protects a buyer, seller, or lender against losses if the title company commits an act of theft or fraud with regards to settlement funds or fails to comply with written closing instructions. In our area, a CPL costs $25.
Title Search: A title search is performed to examine the detailed information about a property. A title search verifies the ownership of the property and can reveal things about a property like unpaid taxes and liens against the home, which have to be paid upon closing. In our area, a title search costs about $175.
Recording Fee: The recording fee is a fee paid in order to make an official record of your home's change of ownership. On the Springfield, Missouri area this typically costs $24 for the first page and $3 for each additional page.
After your home is sold, it is important to remember to budget for costs associated with moving. If you are buying a new home, you will be responsible for paying all of the costs that go along with the home buying process, such as a down payment on a home and buyer closing costs. If you opt to rent after selling your home, you may be required to pay for things like a security deposit and pet fees. When selling your home and moving, you will also likely incur costs from moving and storing your possessions.
Optional and Additional Costs:
There are several other potential or optional costs that can be included in seller closing costs, such as a one-year home warranty, a trustee deed, a second mortgage, liens against the property, and more. Your listing agent will help you understand what your particular closing costs will be based on your individual circumstances. Closing costs may also vary depending on what title company the seller chooses to use. In Johnson ounty area, a very reputable title companies is Kansas City Title
When it comes time to sell their homes, home sellers must be aware of the costs associated with selling so that they may have a successful home selling process. For more information about what closing costs you will be required to pay, talk to your listing agent.
Today, you made it halfway through my 12 Step Guide to Getting Your Home SOLD! You learned all about the costs and fees associated with selling your home. Next time, in Step 7, we will discuss home staging. Making your home look as appealing to buyers as possible can help you get it SOLD quicker. Stick around!
Until Next Time,
Ana Spradling, Your Realtor with Real Results
When selling your home, it is important to work with a Realtor who knows how to get your home SOLD! With me as your listing agent, I will market your home aggressively to buyers and buyers' agents using a variety of marketing techniques, I will help you price your home so that it will sell quickly and at the highest rate of return for you, and I will help you understand each step of the home selling process. Learn more about my services to home sellers and request a free in-home marketing presentation, contact me at (913) 954-7123 or at ASpradling@ReeceAndNichols.